1099-NEC/MISC Tracking and Reporting

1099-NEC/MISC Tracking and Reporting

1099-NEC/MISC Transaction Tracking

If you need to have 1099-NEC/MISC forms prepared and sent out to vendors that are not employees, CustomBooks™ can assist you by tracking the amounts spent for 1099 Vendors throughout the year. When it’s time to send them, run a report in CustomBooks™ and upload the data electronically using our partner, Track1099.com for the simplified online creation and distribution of the forms to your 1099 vendors. No more expensive forms or envelopes to buy. No forms to manually fill out. Everything is done electronically for your convenience!

Setting up CustomBooks™ to Track Non-employee Compensation (NEC) or Miscellanious Information (MISC)

There are three main steps to complete in CustomBooks™ to ensure proper reporting. Once these three items are in place, getting the data needed to export and upload to Track1099.com is quick and easy.

Step 1: Set up the Company Card

When the company or vendor is created or edited in CustomBooks™, ensure that the information on the 1099 tab has been completed and that the vendor’s primary mailing and email addresses have been entered on the Vendor card. Completing this information when the vendor is created will save time at the end of the year. All this information can be found on the I-9 form that you had your vendor fill out when establishing the relationship.

For each vendor that will need a 1099 form produced:
  1. Enable the the 1099 Vendor checkbox.
  2. Next, ensure that following items are completed on the 1099 Tab:
    1. The Full Name of the person (not the DBA or business name).

    2. The Federal ID Type (SSN or EIN).
    3. The Federal ID Number.
    4. In addition, a valid address will need to be entered on the Addresses/Contacts tab and should be the vendor’s primary mailing address.



You can view the vendors that have have been marked as 1099 vendors by navigating to Lists > Vendors and sorting by the 1099 Vendor column.

Step 2:  Set Up the 1099 Accounts

Any accounts that are used to track 1099 related expenses will need to have a 1099 Category assigned to them. This step may have been completed when the Chart of Accounts was created for your company. If you are not sure, please consult with your CPA or Accountant.

To enter a 1099 category on an account:
  1. Navigate to Accounting → Chart of Accounts and open the account by double-clicking on it in the list.   
  2. Choose the appropriate 1099 Category from the drop-down list. Each category is associated with a box on the 1099 form.
  3. Click Save or Save and Close.



    You can view the accounts that have categories already assigned by navigating to the Chart of Accounts and sorting by the 1099 Category column. The 1099 Category is not a default column but it can be added easily through the Columns dropdown.


Step 3: Excluding Payment Methods

Certain methods of payment may handle 1099 reporting requirements for you. To avoid double reporting, these payment methods may be excluded from 1099 reporting in CustomBooks™.

Important: It’s important to understand the 1099 requirements when using this feature. Please consult with a tax specialist or check the rules and regulations with the IRS or a tax specialist for more information regarding your specific situation.

To exclude a payment method from 1099 reporting in CustomBooks™:
  1. Navigate to the Payment Methods (Lists →  Payment Methods).
  2. Enable the checkbox labeled “Exclude from 1099”.


Allowing Balance Sheet Accounts in 1099 for Bills/Bill Payments

For accounts using the Previous Cash Basis accounting method for 2025 reporting (accounts created in 2025 or earlier) that use Balance Sheet accounts on Bills for 1099 Vendors, make sure the "Allow Balance Sheet Accounts in 1099" checkbox on the Bill is enabled. This checkbox allows Balance Sheet account types—such as Other Current Assets, Fixed Assets, Long-term Assets, Other Current Liabilities, Long-term Liabilities, and Equity—to display on the Vendor 1099 report when a Bill Payment is posted.

To enable the Allow Balance Sheet Accounts in 1099 on a Bill:
  1. Navigate to Purchases → Bills > Open the Bill.
  2. Click the Allow Balance Sheet Accounts in 1099 checkbox.
  3. Click Save or Save and Close.


Vendors 1099 Report

With the preceding setup steps completed, the Vendors 1099 report may be run at any prior to the reporting deadlines. For more information, see instructions for Form 1099-Misc and 1099-NEC on the IRS website.

Running the Vendors 1099 Report

To run a Vendors 1099 Report:
  1. Navigate to Reports → Accounting → Vendors 1099 Report.
  2. Choose a Report Period or Tax Year (typically last year) from the drop-down list.
  3. Select the Vendor Type from the dropdown (1099 Vendors, Non-1099 Vendors, or All)
    1. Non-1099 Vendors will only include vendors that do not have the 1099 Vendor checkbox check on the Company Card.
  4. Select the Form Name (1099-NEC, 1099-MISC, or All).
  5. Select  the Payment Method (Included in 1099, Excluded in 1099, or All).
  6. Choose the Payment Threshold Status:
    1. Meet threshold: This will only include 1099 vendors for whom the payment amount threshold has been reached.
    2. Below threshold: This option will include vendors for whom the threshold has not been met.
    3. All: This will display both "met" and "below" threshold vendors.
  7. Click Run Report.



Exporting the Report to CSV

  1. To export a compatible CSV file for Track 1099, click the Export to track1099.com CSV file button located on the yellow command bar.
  2. Go to Track 1099 (http://track1099.com/) and follow the instructions to prepare the data for upload.






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